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Back Pain Of The Envelope

Someone asked me if Dr Ho’s Decompression Belt might be a good target for investment.

My response:

The “back pain” market is big at about $100B/yr and this belt fits into that market. So at least in theory it could capture a significant percentage of that market. Roughly speaking, as a startup you want a plausible story for how you can reach $1B valuation. One way to do that is 10x yearly revenue of $100M, It looks like these belts are $100-200, so if we say $150 per belt that’s 700K belts per year.

A quick googling shows a video of the belt back in 2011, so let’s say the belt has been available for 10 years. The reviews I found were mixed

Being sold for a decade with mixed reviews means this business would need a major reset for investment to make sense. Generally you seek investment to fund growth ahead of revenue. Like if you can only make 10,000 of them and they fly off the shelf so demand justifies 100,000, but you can still only afford to make 10,000 then you would go to an investor who would front the money for the larger order. At this point there’s no reason to anticipate a large growth in demand, so it would take a major shift in the business model to create more scale.

A strategy might be an investor-fueled advertising blitz to change consumer behavior. Invisalign did that with their plastic braces. However, the utility of Invisalign was obvious. It unambiguously did the thing it promised to do. If the benefit of a product is ambiguous it’s hard to break out of a niche. Additionally, Invisalign has a strong IP moat in that they patented the technology and are the only ones who can deliver it. An inflatable belt doesn’t seem to have anything stopping cheap knockoffs from taking advantage of all the advertising work.

Published inadvicestartupsventure capital

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